Thursday, April 03, 2008

Another Seal Upgrade

Zacks upgraded Wet Seal (WTSLA) today, and bumped its price target by 50%. I generally don't put much weight on Zacks' research, but I'm not one to complain about those that agree with me, hehe.

Here are bits and pieces of what they said in their report:

We continue to believe that Wet Seal is taking the appropriate steps (reducing inventory and scaling back new store openings) to compete in this difficult retail environment. What's more, we are impressed with the strength of its core Wet Seal stores, which drove the company's overall sales and earnings growth.

These factors have made us more bullish on WTSLA shares. As a result, we are upgrading the stock from Hold to Buy and increasing our target price from $3.00 to $4.50.

The stock is cheap and provides a nice safety cushion for investors.

The safety cushion refers to the over $1 per share of cash (net of debt) that the company holds.

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